UK plans to make insurance executives more accountable

LONDON, Nov 26 (Reuters) - Chief executives and other senior
officials at insurance companies in Britain will be made more
directly accountable to regulators for their decisions under
plans announced by the Bank of England on Wednesday.

The plans follow those the Bank's Prudential Regulation
Authority (PRA) has already drawn up for senior bankers,
although they are less demanding in some respects.

Under the proposals, insurers will have to allocate specific
responsibility for developing and embedding the culture of their
firms to one or more senior managers. The watchdog also plans to
introduce new conduct standards for these managers.

"Policyholders are best served by insurance companies with
senior managers who can be held to account and who are
individually responsible for the decisions they make," PRA chief
executive and BoE Deputy Governor Andrew Bailey said.

Regulators have come under fire from lawmakers for bringing
so few bankers to book after lenders had to be bailed out by
taxpayers in the 2007-09 financial crisis.

Under the so-called "reversal of burden of proof" proposals
for banks, top managers would have to prove to regulators they
were unaware of or had challenged dubious behaviour at the time.

This has alarmed bankers, with two directors of HSBC
set to leave the bank because they are unhappy with the
new rules, Reuters reported last month.

The plans for insurers are slightly different, recognising
the differences between the industries, the PRA said.

Regulators would have to show misconduct by an insurance
official was deliberate or that behaviour fell below reasonable
standards. The sanctions that could be imposed against insurance
officials are also in line with those already available, such as
fines, bans and public warnings.

The Association of British Insurers (ABI), an industry body,
said it was reassured the plans recognised the differences
between banks and insurers.

"We will be working with our members... to ensure that the
regime is fit for purpose and ensures a continuing flow of high
level talent into the insurance industry," it said.

The new regime for insurers such as Prudential and
Aviva will apply to chief executives, chief finance
officers, chief risk officers, heads of internal audit and chief
actuaries.

At the Lloyd's of London insurance market, it
will apply to chief underwriting officers and underwriting risk
oversight functions.

A public consultation will run until Feb. 2 and the new
rules will be rolled out from late 2015.

The watchdog will also publish a further consultation on how
non-executive directors at insurance and banking firms will come
under the new accountability rules.
(Editing by Louise Heavens and Mark Potter)